Downtown rental market hot

Conversion of two condo projects helping to fill big need

Hey there, time traveller!This article was published 18/2/2013 (1389 days ago), so information in it may no longer be current.

Some downtown residential developments are proving one man's bane can be another man's boon.

Sluggish sales at two downtown condominium projects -- the Penthouse on Princess at 100 Princess St., and the H2O development on Waterfront Drive -- have prompted their developers to convert the condos into rental units.

While that may have been stressful for the developers, it was welcome for the downtown and downtown apartment-seekers, says one local agent who specializes in downtown condo sales.

"It's all good because the truth is, we needed more rental units in the downtown," Bill Thiessen, of Re/Max Professional Realty, said. "And now, by default, we've got some."

The conversion of the Penthouse on Princess condos added 60 new one- and two-bedroom apartments to the market. And the H2O project will add another 46 this summer when Phase I is completed, and another 46 about a year later when the second phase is finished.

While there continues to be a strong demand for downtown condos, not everyone who wants to live downtown wants to buy, and these units provide some attractive, and much-needed, alternatives for renters, Thiessen said.

The director of marketing for the Penthouse project, which was developed by Alberta-based Taurean Global Properties, confirmed Taurean has had more success renting than selling.

Kendall Hines said only 15 of the units had been sold when Taurean decided last year to convert them to rental units. Since then, 45 of the one- and two-bedroom units have been leased, he said, including 14 in the month of January alone.

Based on the recent level of leasing activity, Hines said he expects the remaining 15 suites to be rented by the middle of next month.

The director of leasing for another recent downtown residential project that opened last April -- the Avenue on Portage -- said they've also had a good take-up on the 75 one- and two-bedroom units in their Portage Avenue complex.

"It (the demand for units) has been fairly consistent," Sabrina Treyturik said, with only three suites still vacant.

Treyturik said most of their tenants are young, single professionals who work downtown and wanted to be able to walk to work.

Hines said it's a similar story with most of the tenants in the Penthouse Rentals (as it's now called) complex, although there are also a few couples.

He and Mark Hofer, who along with his brother, Rick, redeveloped the Avenue Building, said they've found newcomers to the city are quicker to embrace the idea of downtown living than many Winnipeggers.

"We've had great success with people coming here from out of town," Hofer said. "They want to be downtown. It's Winnipeggers who are hardest on our downtown."

Danda Santos, who moved to Winnipeg last summer to take a manager's job with the city's new IKEA store, is one of the out-of-towners who have leased a suite in the Penthouse complex. She said the Exchange District was the only place she wanted to live.

"I fell in love with all of the old buildings," she said, as well as eclectic mix of retail shops.

She said the Exchange also reminded her of some older areas of Vancouver that have gone through the same kind of revitalization downtown Winnipeg is experiencing.

"Twenty years later, they're now beautiful neighbourhoods," she said. "And I get that same feeling from the Exchange. I see that same kind of potential. So for me, it's kind of exciting... and I want to be a part of it."

The developer behind the H2O project -- M2 Engineering owner Michael Mark -- said in a recent interview he has no idea why his condo units didn't sell. But Mark said he had no qualms about converting them to rental units because, like Thiessen, he sees a need for more rental units downtown.

Hines believes it was the lack of on-site parking that made the Penthouse condos a hard sell. Even though Taurean had secured parking spaces in a nearby parkade on King Street, Hines said prospective buyers still balked at the idea of having to walk a block to get to their vehicle.

As an added incentive, Taurean is offering six months' free parking to tenants who sign a one-year lease, Hines said.

Know of any newsworthy or interesting trends or developments in the local office, retail, or industrial real estate sectors? Let real estate reporter Murray McNeill know at the email address below, or at 204-697-7254.

murray.mcneill@freepress.mb.ca

Rental rates

Here are the monthly rental rates for the Avenue on Portage and Penthouse Rentals complexes:

The Avenue:

-- Units range from 450 to 1,100 square feet in size.

-- One-bedroom apartments rent for between $875 and $975, and two-bedroom units for between $1,100 and $1,500.

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